Correlation Between American Airlines and LLOYDS
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By analyzing existing cross correlation between American Airlines Group and LLOYDS BKG GROUP, you can compare the effects of market volatilities on American Airlines and LLOYDS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in American Airlines with a short position of LLOYDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and LLOYDS.
Diversification Opportunities for American Airlines and LLOYDS
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and LLOYDS is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and LLOYDS BKG GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LLOYDS BKG GROUP and American Airlines is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on American Airlines Group are associated (or correlated) with LLOYDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LLOYDS BKG GROUP has no effect on the direction of American Airlines i.e., American Airlines and LLOYDS go up and down completely randomly.
Pair Corralation between American Airlines and LLOYDS
Considering the 90-day investment horizon American Airlines Group is expected to generate 10.55 times more return on investment than LLOYDS. However, American Airlines is 10.55 times more volatile than LLOYDS BKG GROUP. It trades about 0.31 of its potential returns per unit of risk. LLOYDS BKG GROUP is currently generating about -0.18 per unit of risk. If you would invest 1,391 in American Airlines Group on September 13, 2024 and sell it today you would earn a total of 367.00 from holding American Airlines Group or generate 26.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
American Airlines Group vs. LLOYDS BKG GROUP
Performance |
| Timeline |
| American Airlines |
| LLOYDS BKG GROUP |
American Airlines and LLOYDS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and LLOYDS
The main advantage of trading using opposite American Airlines and LLOYDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, LLOYDS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in LLOYDS will offset losses from the drop in LLOYDS's long position.| American Airlines vs. Delta Air Lines | American Airlines vs. Southwest Airlines | American Airlines vs. JetBlue Airways Corp | American Airlines vs. United Airlines Holdings |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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